Shop, Distributive and Allied Employees Association

[2024] FWC 2321

[2024] FWC 2321

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

Shop, Distributive and Allied Employees Association

(AG2024/2313)

Fast food industry
COMMISSIONER ALLISON	MELBOURNE, 4 SEPTEMBER 2024

Application for orders relating to a transferable instrument

1. In April 2024, Lentity Pty Ltd purchased two Subway restaurants in Adelaide – Subway Richmond and Subway Hindley Street (Restaurants) – from Synergy Subs Pty Ltd. Several employees who were previously engaged by Synergy Subs Pty Ltd at these Restaurants were offered and accepted employment with Lentity Pty Ltd (“the transferring employees”). The transferring employees performed the same or substantially the same work for Lentity Pty Ltd as they had for Synergy Subs Pty Ltd. As a consequence, there was a transfer of business from Synergy Subs Pty Ltd to Lentity Pty Ltd within the meaning of s.311 of the Fair Work Act 2009 (the Act).

1. Prior to the transferring employees being engaged by Lentity Pty Ltd, the transferring employees were covered by the Synergy Subs Pty Ltd Enterprise Agreement 2023 (the Agreement). In accordance with s.313 of the Act that Agreement is now taken to cover Lentity Pty Ltd in relation to the transferring employees.

1. In addition to the transferring employees, Lentity Pty Ltd has engaged new employees (“the non-transferring employees”) to work at the Restaurants, performing similar work to the transferring employees. The non-transferring employees are currently not covered by the Agreement but are instead covered by the Fast Food Industry Award 2020 (the Award). The Shop Distributive and Allied Employees Association (SDA) represents employees at Lentity Pty Ltd, and has made an application to the Commission seeking an order that the Agreement covers all of Lentity Pty Ltd’s workforce working at the Restaurants. Lentity Pty Ltd supports this position.

1. This decision considers whether I should grant this order under s.319(b) of the Act. In deciding whether to grant the order), the Commission must take into account the matters in s.319(3), which I now do.

The views of Lentity Pty Ltd– s.319(3)(a)(i)

1. Ms Lee Kite, the owner and operator of Lentity Pty Ltd, was copied into all correspondence regarding this application and attended a case management conference regarding this matter on 8 July 2024. The view of Lentity Pty Ltd, the new employer of the transferring employees, is that the application should be granted. Lentity Pty Ltd supports the SDA application and seeks that all of its employees at the Restaurants are covered by the Agreement.

The views of Employees – s.319(3)(a)(ii)

1. The application was made by the SDA on behalf of its members at Lentity Pty Ltd. In addition, the application and accompanying material explaining the effects of the proposed order were served on the affected employees on 22 July 2024. Affected employees were invited to raise any concerns regarding the Application with my Chambers by 29 July 2024. No employee raised any concern.

1. The views of Lentity Pty Ltd, the affected employees, and the relevant union, weigh in favour of granting the order.

Whether any employees would be disadvantaged by the order – s.319(3)(b)

1. Rates of pay for all classifications are higher under the Agreement than the Award. Junior rates of pay, in particular, are more advantageous under the Agreement than under the Award. While the Agreement does not include a laundry allowance, this is incorporated into the hourly rates so that employees receive the benefit of the higher hourly rate for the calculation of entitlements. The rates in the Agreement will increase each year in accordance with the percentage increase in the Annual Wage Review, ensuring they remain above the Award rates.

1. The Agreement provides for enhanced family and domestic violence leave, and has more beneficial provisions relating to evidential requirements for taking personal leave.

1. In addition, the Agreement includes clauses relating to work/care balance which are more beneficial to employees than the Award.

1. In relation to Delegates Rights, the Award provision is more beneficial than the Agreement provision. Lentity Pty Ltd has provided an undertaking addressing this issue and ensuring the more beneficial Delegates Rights provision in the Award will apply. The undertaking is attached to this decision. 

1. Subject to the attached undertaking, I am satisfied that employees will be better off over all under the Agreement than the Award, and that no employee will be disadvantaged by the proposed order.

1. This weighs in favour or granting the orders.

The nominal expiry dates of relevant agreements – s.319(3)(c)

1. The nominal expiry date of the Agreement is 22 March 2027.

1. The nominal expiry date weighs neither for nor against the making of the orders. 

Whether the transfer of the Agreement would have a negative impact on Lentity Pty Ltd productivity – s.319(3)(d)

1. Section 319(3)(d) requires the Commission to take into account whether the transferrable instrument would have a negative impact on the productivity of Lentity Pty Ltd’s workplace. The SDA made submissions, supported by Lentity Pty Ltd, that productivity at the Restaurants would be improved by the proposed order, as all employees would receive the same pay and entitlements for work done. I accept these submissions.

1. This weighs in favour of granting the orders.

Whether Lentity Pty Ltd would incur significant economic disadvantage as a result of the Agreement covering non-transferring employees s.318(3)(e)

1. The SDA made submissions, supported by Lentity Pty Ltd, that Lentity Pty Ltd would not incur significant economic disadvantage as a result of the Agreement covering non-transferring employees. I accept these submissions.

1. This factor weighs in favour of granting of the orders.

Whether there is business synergy between the Agreement and the Award– s.319(3)(f)

1. The SDA did not make specific submissions regarding this factor. There is clearly some business synergy between the Agreement and the Award. On the evidence before me this factor neither weighs in favour nor against the granting of the orders.

The public interest – s.319(3)(g)

1. Section 318(3)(g) requires the Commission to take into account ‘the public interest’.

1. There is public interest in supporting employers and employees entering into an enterprise agreement which provides for terms and conditions of employment that are more beneficial than the Award safety net. Given that non-transferring employees will receive a higher base rate and more beneficial conditions under the Agreement than under the Award, I am satisfied that the orders are in the public interest.

Conclusion

1. Taking into account the matters is s.319(3), I have decided that it is appropriate to grant the application. I will make orders under s.319(1) that Agreement will non transferring employees who perform. An order will be issued separately in PR778771.

COMMISSIONER

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Annexure A